We’ve produced a bit-size best practice update to highlight the impact of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs) that come into force this month.
This article includes bullet-point actions to help members adhere to the new regulations to minimise consumer disputes and TPO Code breaches.
Who do the CCRs affect?
All agents will be affected by CCRs – they apply to all businesses with consumer contracts offering services made on-premises (e.g. in branches), made at a distance (including online sales) and off-premises (e.g. in a client’s home).
What do the CCRs replace?
The new regulations will replace the Consumer Protection (Distance Selling) Regulations 2000 and the Cancellation of Contracts made in a Consumer’s Home or Place of Work Regulations 2008.
When do CCRs come into force?
CCRs will apply to all contracts agreed on and after 13 June 2014.
What steps can I take to ensure I’m compliant?
Brief your staff and update your contract paperwork to ensure it complies with the guidance below:
• Service contracts: the ‘Cooling Off’ cancellation period for all service contracts must be extended from 7 calendar days to 14 calendar days. Note: no reason has to be given by the consumer to cancel the contract during this period
• Ancillary contracts: if a consumer cancels their contract, the new regulations require any ancillary contracts to be automatically cancelled, e.g. rent guarantee insurance
• Reclaiming money spent: If you wish to claim a fee to recover money spent marketing a property during the 14 day cancellation period, you must ensure these costs are set out clearly and prominently in the service contract, and gain the consumer’s express permission to start work during that period. Fees must be reasonable, reflect actual costs and not include any element of penalty.
• Refunding client money: You must pay any refund of monies due to a consumer within 14 days of a contract being cancelled to avoid breaching the CCRs.
Did you know?
• If you complete the service within the cancellation period, the consumer’s right to cancel is lost e.g. tenant find only service.
• It remains a criminal offence not to inform a consumer buying off-premises of their cancellation rights.
• You must inform the consumer of your TPO membership and disclose the appropriate TPO Code of Practice at the outset.
• CCRs do not apply to the agreement between the seller and buyer to purchase the property or the tenancy agreement between the landlord and tenant.
• Consumers will not be liable for costs which they have not been told, pre-contract, that they must bear (e.g. marketing costs, if those costs were not ‘prominent’ and transparent in the contract)
• Schedule 3 of the CCRs provide model instructions for the appropriate cancellation notice to be provided by the trader and a model cancellation form for consumer use.
How do I find out more?
The Department for Business, Innovation & Skills has produced a number of materials that are published on the link below, under ‘detail’ and ‘latest’: